Form an LLC in Vermont

Vermont rules that shape a new LLC

A Vermont LLC's recurring deadline is keyed to its own fiscal year end. 11 V.S.A. § 4033(c) requires the annual report to reach the Secretary of State "within three months after the expiration of the company's fiscal year," and the Secretary of State tells filers to search for the business online to find the fiscal year end on record.

Neither § 4012(a) nor the Secretary of State's fee tables carries a late fee for a missed annual report. Missing it terminates the articles of organization under § 4034(a)(1). Reinstatement costs the $45.00 annual report fee plus a $35.00 reinstatement fee for each year missed, and it relates back to the effective date of termination as if the termination had never occurred.

The Department of Taxes adds an entity-level tax: limited liability companies engaged in activities in Vermont file a Business Entity Income Tax return, and "Generally, a minimum tax of $250 is due."

Three more Vermont specifics: the articles of organization must state whether the company is a low-profit limited liability company; the designated office may sit outside Vermont while the agent for service of process may not; and adding or dropping the word "Vermont," or the phrase "Green Mountains," does not make a name distinguishable from one on record.

Filing the articles of organization

The formation document is the articles of organization, filed with the Secretary of State under § 4023. The fee is $155.00, set by § 4012(a)(1) and carried at the same amount on the agency fee schedule. It does not change with the method: the Secretary of State states that online filing is the preferred method and that "There is no extra fee for online filing."

Section 4023(a) fixes the contents: the company name; the address of the initial designated office; the name and street address of the initial agent for service of process; the name and address of each organizer; a statement to that effect if the company has no members at the time of filing; and whether the company is an L3C. Section 4023(b) makes owner, officer and principal information optional, so the articles need not name members or managers.

Filings run through the Online Business Service Center. No downloadable form is published: the Business Filings page states that "Paper forms are not available online at this time, but are available by request."

Both published processing figures come from the Secretary of State's LLC page. Online filing "normally takes less than 1 business day," and the office asks filers to "allow 7-10 business days for the processing of any filings received by mail." No expedited tier and no expedite fee appear in the fee list at § 4012(a), items (1) through (22), or in any table on the fee schedule.

The LLC page also carries a caution: "Do not invest in websites, signs, business cards, or other marketing materials until you receive a certificate confirming the availability and your ownership of the requested name."

Naming the company

Section 4005(a)(1) requires the name, as set forth in the articles of organization, to contain the words "limited liability company" or "limited company" or the abbreviation "L.L.C.," "LLC," "L.C.," or "LC." The word "limited" may be abbreviated as "Ltd." and "company" as "Co." A low-profit company's name must contain the abbreviation L3C under § 4005(a)(2). A professional limited liability company's name must contain the word "Professional" or the abbreviation "P.L.C.," "PLC," "P.L.L.C.," or "PLLC," under § 4011(g)(2)(E).

Section 4005(b) sets the availability test: the name must be distinguishable in the records of the Secretary of State from every non-individual person incorporated, organized or authorized to transact business in Vermont, and from each reserved name. Under the business name rules at C.V.R. 04-020-001, Rule 3(a)(2), names are not distinguishable where the only difference is the addition or omission of the word "Vermont," or the phrase "Green Mountains," or any abbreviation of either.

Names can be checked in the business search on the Online Business Service Center. A reservation application costs $25.00 under § 4012(a)(5), and § 4006 routes reservation to § 1652: if the Secretary finds the entity name available, it is reserved "for the applicant's exclusive use for 120 days." A renewal is another $25.00.

Agent for service of process and designated office

Section 4007 requires a Vermont LLC, and a foreign LLC authorized to do business in Vermont, to designate and continuously maintain a designated office for notification purposes, "which may but need not be a place of its business, and may but need not be located in this State," together with an agent for service of process under § 1655.

Section 1655(a) sets who may serve: the company gives the name, email and address information of an individual resident of Vermont, or of a business organization that has a place of business in, and is authorized to conduct business in, Vermont. Under § 1655(b), designating an agent attests that the agent consents. The initial agent's name and street address go into the articles under § 4023(a)(3). The Vermont registered agent guide covers the role in more depth.

Changing the agent or the designated office is a statement of change under § 4008. The fee is $35.00 under § 4012(a)(9), "and not to exceed $1,000.00 per filer per calendar year." An agent's statement of resignation carries no fee, and under § 1655(e)(2) the agency terminates on the earlier of 30 days after the Secretary of State files that statement, or the date a statement of change designating a new agent takes effect.

The annual report

Section 4033(a) requires each domestic LLC, and each foreign LLC authorized to transact business in Vermont, to file an annual report giving the company name and state or country of organization, its designated office address, and its agent's name, email and address. All annual reports must be completed online.

The report is due "within three months after the expiration of the company's fiscal year" under § 4033(c), which the Secretary of State restates as three months "following the fiscal year end on record." The fee is $45.00 for a domestic LLC under § 4012(a)(15) and $170.00 for a foreign LLC under § 4012(a)(16).

No late fee appears in § 4012(a), which lists every fee the Secretary of State collects on a chapter 25 filing, or in the fee tables. What § 4034(a)(1) sets instead is termination: the articles of organization of a company that fails to file the report "shall terminate." For a foreign LLC, § 4034(a)(2) terminates the certificate of authority.

Section 4034(a)(3) puts recovery on file-and-pay terms. The company files the report with the annual report filing fee and the reinstatement fee for each year it failed to file, and the articles "shall be reinstated by the Secretary of State." That reinstatement fee is $35.00 under § 4012(a)(17). Under § 4034(b), reinstatement relates back to the effective date of termination as if it had never occurred, and § 4034(d) preserves the validity of acts done in between. A company loses the right to retain its name if the report is not filed on or before five years after the date it was due, under § 4034(c).

Vermont taxes

Limited liability companies engaged in activities in Vermont file a Business Entity Income Tax return with the Commissioner of Taxes. Most file Form BI-471, and "Generally, a minimum tax of $250 is due." An entity owned exclusively by Vermont residents, with income and loss deriving only from Vermont, may file the simplified Form BI-476, and the $250 minimum entity tax is paid with that return. Both are due on the date established for filing under the Internal Revenue Code. Vermont-attributable income passes through to the members at the individual or corporate rate, and each member also files a Vermont income tax return. The 2025 Vermont tax rate schedules run 3.35%, 6.60%, 7.60% and 8.75%.

Vermont sales tax is charged at 6% on retail sales of tangible personal property unless exempted by law, and use tax falls on the buyer at the same rate. The Meals and Rooms Tax is 9%, and the Alcoholic Beverage Tax is 10%. A municipality may vote to levy 1% local option taxes on top of those rates, bringing sales to 7%, meals to 10%, alcoholic beverages to 11% and rooms to 10%. Local option tax is destination-based, and no additional registration with the Department is necessary. The Vermont LLC tax guide goes further.

Registration and licensing

The Department of Taxes places the Secretary of State filing first, before the business begins operating in Vermont. A business tax account is then required if the business will collect sales and use, meals and rooms, employer withholding, cannabis excise, cigarette and tobacco, or fuel tax, with separate accounts for the first three. Other tax types need no preregistration, and a business tax account is not renewed. Registration runs through myVTax. A Meals and Rooms Tax license must be obtained before that tax is collected, costs nothing, must be displayed where customers can easily see it, and is obtained separately for each location. Occupational licenses come from the Office of Professional Regulation, which sits within the Secretary of State.

Operating agreement

Chapter 25 supplies the defaults. Section 4003(a) provides that "To the extent the operating agreement does not otherwise provide, this chapter regulates the affairs of the company, the conduct of its business, and governs relations among the members, among the managers, and among members, managers, and the limited liability company." Section 4003(b) then lists eleven terms the agreement may not vary, among them the books and records rights in § 4058 and the winding-up requirement in § 4101. Section 4003(j)(2) lets one person intending to become the initial member assent to terms that become the operating agreement on formation. The agreement is not filed with the state and § 4012(a) carries no fee for one, although § 4023(b)(1) allows terms permitted in an operating agreement to be placed instead in the public articles. General drafting points sit in the operating agreement guide.

EIN

An EIN is issued by the Internal Revenue Service and is not a Vermont filing. The EIN guide sets out the application steps.

Other Vermont filings

Section 4011(c) gives a Vermont LLC perpetual duration, and § 4011(d)(2) keeps a credit union or insurance company regulated under Title 8, other than a captive insurance company under 8 V.S.A. chapter 141, and a railroad company regulated under Title 19, out of the form. Two elective variants sit in the statute: the low-profit limited liability company under § 4161, available for as long as the company satisfies § 4162, and the blockchain-based LLC under § 4172, for a company that uses blockchain technology for a material portion of its business activities.

An assumed business name is registered with the Secretary of State for $70.00 under 11 V.S.A. § 1625, "not later than 10 days after commencement of business" under § 1621(b). After dissolution and winding up, a company ends its existence by filing articles of termination under § 4105(a), for $20.00 under § 4012(a)(20); see the Vermont LLC dissolution guide. A company organized elsewhere applies for a certificate of authority for $155.00 under § 4012(a)(2), with a certificate of existence dated not earlier than 90 days before filing under § 4112(c). The Vermont foreign LLC guide has more.

Frequently asked questions

How much does it cost to form an LLC in Vermont?

The articles of organization cost $155.00 under 11 V.S.A. § 4012(a)(1), and the Secretary of State's fee schedule carries the same amount. The fee is the same online or by mail, and the Secretary of State states that there is no extra fee for online filing.

When is a Vermont LLC annual report due?

Within three months after the expiration of the company's fiscal year, under 11 V.S.A. § 4033(c). The Secretary of State tells filers to search for the business online to determine its fiscal year end on record. The fee is $45.00 for a domestic LLC.

What happens if a Vermont LLC does not file its annual report?

The articles of organization terminate under 11 V.S.A. § 4034(a)(1). No late fee appears in the fee list at § 4012(a) or on the Secretary of State's fee tables. Reinstatement requires the annual report fee plus a $35.00 reinstatement fee for each year the company failed to file, and it relates back as if the termination never occurred.

Does a Vermont LLC pay a state entity tax?

The Vermont Department of Taxes states that limited liability companies engaged in activities in Vermont must file a Business Entity Income Tax return and that a minimum tax of $250 is generally due. Most entities file Form BI-471, and the $250 minimum is also paid with the resident-only Form BI-476.

Who can act as an agent for service of process in Vermont?

Under 11 V.S.A. § 1655(a), an individual resident of Vermont, or a business organization that has a place of business in, and is authorized to conduct business in, Vermont. The company's designated office is treated differently: § 4007(1) says it may but need not be located in Vermont.